A court in Nairobi has temporarily stopped the implementation of the controversial Finance Act 2023, following a petition filed by Busia Senator Okiya Omtatah. Despite the order, the Energy and Petroleum Regulatory Authority (EPRA) has reviewed fuel prices upwards to reflect the Finance Bill proposal to raise VAT on fuel from 8 percent to 16 percent.
Retail pump prices of petrol in Nairobi have been raised from Ksh185.05 to Ksh195.53. Diesel will cost Ksh179.67 up from Ksh167.28, and Kerosene will cost Ksh173.44 up from Ksh161.48. Omtatah slammed EPRA stating that the move was a violation of the court order he secured.
Omtatah had maintained in his petition that a number of proposals in the bill were unconstitutional. The matter will be heard on July 5th.
The Finance Bill had elicited widespread outrage and frustration as it included a raft of new levies and increased taxes on income, housing, content creation and fuel among others – amid a cost of living crisis that has seen the prices of key items including foods skyrocket.
The increase of fuel prices is inevitably set to trigger further increases on prices of key items, as manufacturers and transporters farmers pass the additional costs on to consumers.
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President William Ruto had defended the Finance Bill stating that it was necessary to enable creation of much-needed new jobs and improved economic conditions. The VAT increase on fuel is expected to generate Ksh50 billion annually.
“The power to impose taxes is not absolute, it is a donated power by the people to the executive and they deposit it not to the Executive but to the parliament. Article 209 and 210 of the Constitution states clearly that taxation can only be done as provided by the legislation…that power cannot be donated to any other organ,” Omtatah had maintained in his petition.
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